Fuel prices hit three-year high

Matt Allan

Petrol and diesel prices have reached their highest levels for three years.

Both fuels saw increases of more than 2p per litre during November, as rising oil prices pushed up wholesale costs.

A litre of petrol reached an average of 120.78p per litre and diesel hit 123.18p per litre.

The rises mean that the cost of filling an average family car’s tank with petrol is now £66.43 – £3.55 more than in July when unleaded was at its cheapest point of 2017 – and a tank of diesel now costs £67.75 – £4.50 more than in July.

While the rising price of oil has pushed costs up, observers say that the strengthening of the pound against the US dollar has kept them in check to some extent.

The end of the month also saw the OPEC, the Organization of the Petroleum Exporting Countries, agree to extend its production cut from March to the end of 2018. The organization has been restricting production in an effort to prop up wholesale oil prices.

RAC fuel spokesman Simon Williams said: “The market had been expecting OPEC to extend its production cut until the end of next year so after an initial rise in the price of oil during the day of the meeting, things cooled down.

“Even though the oil price is now consistently above $60 a barrel, the increased value of sterling against the dollar is helping to keep fuel prices down at the pumps. This is good news for motorists as it means petrol and diesel prices are unlikely to shoot up, in fact we may even see them come down very slightly in the next week or so.

“The price we will pay for fuel at the pump into 2018 very much hinges on how effective OPEC’s production cut continues to be in reducing the global glut of crude oil. The increased barrel price this is designed to create may also work against the group as it makes fracking for oil in the US more financially viable, which in turn may lead to America increasing its production and filling the gap from the cuts. If this happens it should mean forecourt prices won’t go shooting up.”